IFC Debt Capital Market Solutions for Latin America and the Caribbean. by Treasury Client Solutions

Transcription

1 IFC Debt Capital Market Solutions for Latin America and the Caribbean by Treasury Client Solutions 1

2 IFC Debt Capital Markets Solutions in LAC Contents Overview of IFC Focus on Debt Capital Markets Issuing in Local Markets Helping Clients Access Capital Markets Investing in Thematic Bonds Contacts 2

3 Overview of IFC 3

4 Focus on Debt Capital Markets

5 IFC Overview Who We Are A member of the World Bank Group with a mission to promote development through investment in private sector Owned by 184 member countries Providing debt (loans, bonds and other fixed income instruments) and equity investments to private sector in emerging markets for over 60 years Global presence in more than 100 countries and working with over 2,000 private sector clients 5

6 Overview of IFC IFC s History: Over Six Decades of Creating Opportunity IFC was founded 12 years after the Bretton Woods Conference created the World Bank to finance post- WWII reconstruction and development by lending to governments IFC's first investment: a $2 million loan to help the Siemens affiliate in Brazil manufacture electrical equipment IFC s first syndication mobilizes $600,000 for Brazilian pulp and paper company Champion Cellulose. The project also launches IFC's syndications program IFC creates a Capital Markets Department to strengthen local banks, stock markets, and other intermediaries IFC becomes financially independent from the rest of the World Bank Group, gaining approval to issue its own bonds in international capital markets AAA Credit Rating: IFC receives the highest possible endorsement of financial health from private rating agencies IFC launches its first Global Dollar Bond IFC Asset Management Company is launched as a third business. IFC Asset Management Company invests thirdparty capital in a private equity fund format IFC 3.0 takes a holistic approach to tackle development challenges by creating markets and mobilizing private sector capital. 6

7 Overview of IFC Strong Shareholder Support IFC is a legally distinct entity of the World Bank Group with its own articles of agreement, balance sheet and staff Owned by 184 shareholders: governments of member countries More than 50% of capital is held by AAA/AA sovereigns IFC does not pay dividends or taxes; profits are channeled back into investments in developing member countries Very solid franchise, supported by 184 member countries, and a track record of about 60 years An unusually diverse composition of government shareholders compared with most MLIs. Standard & Poor s 27 June 2017 Mexico, 1% Indonesia, 1% Spain, 1% Argentina, 2% Switzerland, 2% Australia, 2% Belgium, 2% Saudi Arabia, 2% 164 other countries, 23% Brazil, 2% Netherlands, 2% China, 2% Italy, 3% Canada, 3% The credit quality of IFC's shareholders has been very high throughout the organization s history. Moody s 29 November 2017 Russia United States, 22% Japan, 6% Germany, 5% France, 5% United Kingdom, 5% India, 4% 7

8 IFC Overview What We Do Integrated Solutions, Increased Impact Investment Debt (loans, bonds and other fixed income instruments) Equity Trade and commodity finance Derivative and structured finance Blended finance Advice Financial sector Investment climate Public-private partnerships Agribusiness Energy and resource efficiency Mobilization Mobilization of third party investment in debt and equity format Syndications IFC Asset Management Company (AMC) $23.3 billion committed in FY18 $51.7 billion committed portfolio over $300 million in advisory services income annually $24 billion syndicated in 5 years 13 funds with $10.1 billion under AMC s management Figures as of 30 June

9 IFC Overview Sustainability: Alignment with United Nations SDGs IFC has two overarching goals: Ending extreme poverty by 2030 and boosting shared prosperity Across sectors and regions, IFC seeks to promote:» Employment creation and economic growth» Gender equality in business and life» Environmental and social sustainability» Climate change adaptation and mitigation» Partnership with private investors to mobilize new sources of finance WORLD BANK GROUP TWIN GOALS IFC CROSS-SECTOR IMPACTS IFC SECTOR IMPACTS Promote Investment Services and Advisory Services for strategic sectors including:» Infrastructure» Agriculture» Financial inclusion» Health and education The above is not an exhaustive mapping but represents an overview of IFC s approach to support the achievement of the SDGs. Given that cross-sectoral impact is delivered through investments and advisory operations in the strategic sectors, some overlaps exist in this mapping. 9

10 US$ billions Overview of IFC Consistent Asset Growth IFC s growth is financed predominantly by retained earnings: IFC s total disbursed loans, equity, and net liquid assets at fiscal year-end % % FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Loans and Other Debt Equity Investments Net Liquid Assets IFC s fiscal year-end is 30 June 10 10

11 Overview of IFC Strong Fundamentals IFC exercises prudent financial discipline IFC has one of the lowest leverage ratios of any supranational Equity investments are funded by IFC s net worth, not its borrowings Extremely strong financial profile, as demonstrated by our risk-adjusted capital ratio after adjustments of 23% and stronger liquidity ratios than most peers Standard & Poor s 27 June 2017 Liquidity ratio Leverage Risk-adjusted capital 100% 75% 50% 25% 45% min min 45% actual 100% 100% actual max 4.0x 4.0x max actual 2.5x 2.5x actual $25 $20 $15 $10 $5 min $20.1 $24.7 actual actual $24.7 0% (percentage of estimated net cash requirements for the next 3 years) 0 Debt to net worth, times $0 In USD billions Actual level figures as of 30 June 2018 Minimum and maximum thresholds based on triple-a rating methodology guidelines as agreed with rating agencies 11 11

12 US$ billions Overview of IFC Track Record on Profitability IFC has recorded operating profit every year since its founding in Asian, Russian Crises Brazil Crisis Argentina, Turkey Crises EM growth Global Financial Crisis EM growth Deleveraging FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Operating profit IFC s fiscal year-end is 30 June 12

13 Overview of IFC Highly Diversified Global Portfolio IFC has diversified exposure in 125 countries and over 2,000 companies Industry portfolio diversification Regional portfolio diversification Multi-Region Funds Other Tourism, Retail & Construction Health & Education Telecom & IT Oil, Gas & Mining 5% 3% Financial Markets Middle East and North Africa 8% 8% 20% Latin America and the Caribbean Trade Finance 6% 5% 35% Financial Markets 29% Sub-Saharan Africa 14% Manufacturing 6% 18% Collective Investment Vehicles 7% Agribusiness & Forestry 7% 19% Infrastructure 20% Funds 8% Trade Infrastructure Finance 6% East Asia and the Pacific 15% 17% Europe and Central Asia South Asia Actual level figures as of 30 June

14 Overview of IFC IFC s Strategy in Latin America: Creating Markets Priorities for the Region Capital Markets development Innovation and in particular fin-tech Infrastructure and energy Climate and agribusiness Regional integration Strategic Approaches Local Presence IFC serves its clients from five (5) regional hubs and sixteen (16) local offices: Mexico City Gulf of Mexico Port-au-Prince Kingston Guatemala City Tegucigalpa San Salvador Managua Santo Domingo Caribbean Sea Port-of-Spain ATLANTIC OCEAN Market Creation - improve upstream enabling environment for private sector Bogota Cascade- Maximize financing for development and minimize public debt PACIFIC OCEAN Lima La Paz Rio de Janeiro São Paulo Buenos Aires IFC Hub Offices IFC Country Offices ATLANTIC OCEAN 14

15 Overview of IFC IFC s Strategy in Latin America: Creating Markets Country Engagement: Strengthen Enabling Environment - WBG: Identify constraints and opportunities to achieve twin goals (Systematic Country Diagnostic - SCDs) - WBG: Identify high-impact programs with country ownership (Country Partnership Framework - CPFs) - Support to structural reforms through Development Policy Loans (DPLs) - Strategic use of Analytical and Advisory Services (ASA) - Reduce regulatory constraints to attract private investment - Improve PPP framework to absorb more private capital Invest & De-Risk - Provides IFC s own capital for demonstration and additionality - Leverage MIGA s political and credit risk insurance product - Guarantees and first loss insurance Mobilize - Expand financing through greater use of mobilization vehicles- AMC, syndications, MCPP - Capital market development - Strengthen insurance market and tap into pension funds - Local currency lending (IFC) - Mobilize private sector financing and risk participation through MIGA guarantees Private Sector Finance Cascade Approach High Potential Commercial Viability Limited Potential for Commercial Viability Upstream Project Development Support Policy, Regulatory, Sector Reform Blended Finance to Bridge Viability Gaps under implementation work in progress further effort needed Public Sector Finance 15

16 Overview of IFC IFC s Portfolio in Latin America LAC s portfolio represents 22% of IFC s total portfolio. LAC s committed total portfolio in FY19 was $17.9 billion In FY 18, IFC committed a total of $5 billion in new projects* LAC FY18 Outstanding Portfolio by Country LAC FY18 Outstanding Portfolio by Sector Other (<5%) 21.6% Brazil 24.8% CTT 6.8% Peru 4.8% INFRA 28.7% FIG 41.0% Latin America Region 5.2% Colombia 10.1% Panama 7.1% Chile 7.8% Mexico 9.2% Argentina 9.4% MAS 23.5% *including mobilization and trade finance 16

17 Focus on Debt Capital Markets 17

18 Focus on Debt Capital Markets Why are Debt Capital Markets important for IFC? Sound financial markets are vital to development as they ensure efficient resource allocation, create jobs, and spur economic growth Debt markets in particular are crucial sources of capital funds, especially to help close huge financing gap in sectors like Infrastructure and Housing They create channels for domestic savings such as those managed by pension funds and other institutional investors to be put to productive use in the local economy $49 trillion: Global Infrastructure Funding Gap for $3.3 trillion a year through McKinsey, Bridging Global Infrastructure Gaps June

19 Focus on Debt Capital Markets IFC: A One-Stop Shop for Capital Markets IFC supports domestic capital market development through: issuing local currency bonds advice to regulators, authorities, and market participants; and helping first-time issuers access capital markets IFC promotes access to local currency finance through loans, swaps, and structured products that are customized to best meet client needs 19

20 Focus on Debt Capital Markets Example: IFC s Milestones in the Colombian Local Currency & Debt Capital Markets IFC s Comprehensive Approach to Fostering Debt Capital Markets through: IFC s Benchmark Bonds Swap Markets Corporate Bond Markets Asset-Backed Securities Infrastructure Markets Segundo Mercado Green Bonds : IFC issues inaugural El Dorado bonds showing its strong commitment to the development of the Colombian debt capital markets. 2001: Ministry of Finance of Colombia gives its consent for IFC to issue Colombian Pesos (COP) denominated bonds. 2001: IFC invests in Titularizadora Colombiana to support the creation of securitization markets for residential mortgages. 2007: IFC establishes domestic Bond Program in Colombia to expand its ability to provide local currency loans in Colombia. 2006: IFC executes its first fixed rate swap in COP to provide financing to Fundación WWB Colombia > : IFC starts credit enhancing Colombian corporate bond issuances providing companies with access to capital markets : IFC provides credit enhancement for residential mortgage backed securities (RMBS) to help the Colombian securitization markets to take off. 2015: IFC issues COP-linked bonds in the offshore market helping to crowd in foreign investors into global COP markets. 2007: IFC expands its swap capabilities in COP by providing an Inflationlinked local currency loan to Fundación Social. 2015: IFC executes its first floating rate swap using IBR rate further promoting the use of IBR as the liquid floating rate benchmark > : World Bank Group launches an initiative to develop capital markets for infrastructure and housing finance in Colombia. 2017: Regulator approves the Global Medium Term Notes (GMTN) program to introduce OECD-type issuance platform in the Colombian debt capital markets. 2016: IFC invests in an infrastructure debt fund promoting institutional investors participation in the 4G Program. 2014: IFC invests in Financiera de Desarrollo Nacional (FDN) to support infrastructure development. 2015: IFC purchases Bancamia s inaugural bond issuance in Segundo Mercado to promote Segundo Mercado (SM) as an alternative debt market for smaller issuers. -> 2017: IFC executed an IBR swap for 20y the longest swap executed in IBR in the market 2017: First COP issuance under the GMTN program promoting international capital markets standards in the Region 2016: IFC purchases La Hipotecaria s inaugural bond issuance in Segundo Mercado 2017: IFC purchased Bancolombia s COP Green Bonds the first green bond issued in the market. -> 2018: To date IFC has provided local currency solutions for about US$1.5 billion equivalent, in 48 transactions. 2016: IFC anchors Bancamia s second bond issuance in Segundo Mercado introducing two new institutional investor into SM. 2017: IFC purchased Davivienda s COP Green Bonds the largest green bond issued in the market. 2017: IFC purchases Banco Mundo Mujer inaugural bond issuance in Segundo Mercado 2018: IFC purchased EPSA s COP Green Bonds the first green bond issued by a Corporate in the market 20

21 Issuing in Local Markets 21

22 Issuing in Local Markets Strong focus on Local Currency Bond Issuances IFC aims to help develop local capital markets : - To create catalytic impact for future corporate bond issuances and facilitate financing through demonstration and signaling effect - To test and improve domestic processes for bond issuance and encourage changes in regulation (e.g. cost of issuance, pension fund asset allocation) - To provide access to a new breed of investors, particularly international investors - To help local markets decouple from more volatile global funding sources For local investors, IFC issuances introduce a high-quality new asset class to the domestic market 22

23 Issuing in Local Markets IFC Local Currency Bond Issues: Benefits 1. Alternative to foreign currency borrowing, reducing various risks 2. Diversify sources of funding beyond banks and equity markets 3. Support major trends that stem from economic and financial growth Issuers: Infrastructure development, privatization, securitization and government decentralization create demand for bond issuance Investors: The growth of insurance and social security create institutional investors that have an appetite for long-term assets such as bonds 4. Strengthen the financial sector Transparency through public disclosure of business operations Competition with local banking sector through dis-intermediation 23

24 Issuing in in Local Markets Focus on Domestic Capital Market Development Europe Middle East Gulf Cooperation Council Hilal Sukuk 2009 USD 100 million due 2014 Armenia Sevan Bond 2013 AMD 2 billion due 2016 Georgia Iveria Bond 2015 GEL 30 million due 2017 Uzbekistan Samarkand Bond 2018 UZS 80 billion due 2020 Kazakhstan 2017 KZT 8.6 billion due 2026 Romania 2017 RON 70 million due 2018 Russia- Volga Bond 2012 RUB 13 billion due 2017 Turkey 2017 TRY 100 million due TRY 150 million due 2022 Africa CFA Franc Kola Bond India China Latin America Brazil Amazonian Bond 2007 BRL 200 million due 2011 Colombia El Dorado Bond 2017 COP 33.7 billion due 2022 (GMTN) 2004 COP 269 billion due COP 125 billion due COP 225 billion due 2007 Costa Rica Irazu Bond 2014 CRC 5 billion due CRC 5.7 billion due 2023 Dominican Republic Taino Bond 2016 DOP 180 million due DOP 390 million due 2017 Peru Inca Bond 2009 XAF 20 billion due XOF 22 billion due 2011 Morocco Atlas Bond 2005 MAD 1 billion due 2012 Namibia Namib Bond 2016 NAD 180 million due 2021 Nigeria Naija Bond 2013 NGN 12 billion due 2018 Rwanda Twigire Bond 2015 RWF 3.5 billion due 2018 Rwanda Umuganda Bond 2014 RWF 15 billion due 2019 Green Masala Bond INR 3 billion due 2020 Maharaja Bond 2014 INR 6 billion due 2019, 2024, Masala Bond 2018 INR 8.7 billion due INR 53.5 billion due 2022, INR 8.6 billion due 2024, INR 33 billion due 2018, , 2014 INR 72 billion due 2016, 2019, 2021, 2024 Masala Uridashi Bond 2016 INR 300 million due 2019 Dim Sum Bonds 2014 CNH 1 billion due CNH 500 million due 2017 (Green) CNH 4.7 billion due CNH 500 million due CNH 150 million due 2016 Panda Bonds 2006 CNY 870 million due CNY 1.3 billion due 2015 Malaysia Wawasan-Islamic Bond 2004 MYR 500 million due PEN 50 million due 2007 South Africa ZAR Green Bond 2015 ZAR 1 billion due 2024 Zambia Zambezi Bond 2013 ZMW 150 million due 2017

25 Issuing in Local Markets IFC s Local Currency Track Record in Latin America and the Caribbean Irazu Bond CRC 5.7 billion(approx. USD 10M) y Second onshore bond in Colones (CRC) in Costa Rica El Dorado Bond COP 33,7 billion (approx. USD 12M) y First issuance under the (GMTN) promoting international capital markets standards in the Region Taino Bond DOP 180 billion (approx. USD 10M) y Second domestic placement in Dominican Peso (DOP) Green Inca Bond PEN 42 million (approx. USD 15M) y First offshore placement of in Soles (PEN) Irazu Bond CRC 5 billion(approx. USD 10M) y First onshore bond in Colones (CRC) in Costa Rica Taino Bond DOP 390 billion (approx. USD 10M) y First domestic placement by an international triple-a rated issuer in the Dom. Republic (DOP) El Dorado Bond COP 225 billion (approx. USD 100M) y First issuance by an international triple-a rated issuer in Colombian Pesos (COP) Inca Bond PEN 50 million (approx. USD 15M) y First issuance by a non-resident in Peruvian Soles (PEN) Amazônia bond BRL 200 million (approx. USD 115M) y First issuance by a foreign entity in Brazilian Reais (BRL) 25

26 Issuing in Local Markets Examples of Local Currency Issuances IRAZU BOND IFC offers Irazu Bond Institutional investors purchase bond IFC manages bond proceeds for local pipeline/to local clients CRC 5,000 million (approx. USD 10M) 2014 AAA 5y 7.86% Coupon First onshore bond in Colones (CRC) in Costa Rica. The issuance instilled market confidence in a period of market volatility The issuance was two times oversubscribed and sold entirely to domestic pension funds CRC 5,700 million (approx. USD 10M) 2018 AAA 5y 8.44% Coupon Second onshore bond in Colones (CRC) in Costa Rica. Proceeds from the bond were used to help boost housing finance for low and middle-income families who otherwise lack access to mortgage loans. 26

27 Issuing in Local Markets Examples of Local Currency Issuances TAINO BOND IFC offers Taino Bond Pension Funds purchase bond Proceeds to finance local projects DOP 390 billion (approx. USD 10M) y 10.5% Coupon First domestic placement by an international triple-a rated issuer in the Dom. Republic. Proceeds from the bond went to the expansion of access to finance for micro, small and medium enterprises and loans for low-income housing in the Dominican Republic DOP 180 million (approx. USD 4M) y 6.75% Coupon Proceeds from the bond were invested in a leading microfinance institution in DR, to expand long-term local currency lending to micro entrepreneurs Second domestic issuance by IFC in the Dom. Republic. 27

28 Helping Clients Access Capital Markets 28

29 Helping Clients Access Capital Markets Accessing Capital Markets and Derivatives: IFC s Value Proposition Bonds Plain Vanilla Bonds Green Bonds Structured Debt Securitization / Asset Back Securities Partial Credit Guarantees Risk Sharing Facilities Covered Bonds Derivatives Risk Management Swaps Interest Rate and Cross- Currency Swaps FX Forwards Commodity Hedges Ability to share expertise in Debt Capital Markets, Structured Finance and Derivatives Ability to commit and invest in over 65 currencies Transfer knowledge and guide the structuring process of capital markets and derivatives Ability to intermediate in the derivatives market without collateral requirements Ability to mobilize international investors 29

30 Helping Clients Access Capital Markets Guide clients from one stage of capital expansion to the next and offer flexibility on product choice for clients financing needs Structured Finance Products Risk Management Products Debt Capital Markets Products Loans Stage 1: - Initial equity Stage 2: - Organic growth - Specific bank financing - Additional equity Stage 3: - Diversified bank financing Stage 4: - Debt capital markets financing with PCGs Stage 5: - Stand-alone debt & equity capital markets financing - Structured issuances Loans & Equity PCG for Bonds Anchor Investment Structured Products 30

31 Helping Clients Access Capital Markets Selected Track Record of Landmark Transactions IFC has helped clients to access capital markets in over 250 transactions in more than 40 countries Examples of Bond Investments Examples of Derivative Solutions Banco Mundo Mujer BMM Bond Issuance COP$80bn (~US$27mm) 5y 2017 Inaugural Bond Davivienda Green Bond COP$433bn (~US$150mm) 10y 2017 Largest Green Bond Bancolombia Green Bond COP$350bn (~US$100mm) 7y 2017 First Green Bond EPSA COP$210bn (~US$74mm) 12y 2018 Inaugural Green Bond in the Colombia real sector Multibank Bond Issuance CHF$38mm (~US$39mm) 3.5y 2017 Bond Issuance in CFH Sun Edison Interest Rate Swap Infrastructure US$82 mm 16.5y 2016 IFC Hedge Provider Ventosa Cross-Currency Swap Infrastructure US$50mm - 15y 2011 IFC Hedge Provider VMLA Currency Fwds Infrastructure US$50mm - 5y 2011 IFC Hedge Provider Banque Centrale Populaire Green Bond USD$111mm 10y 2017 Inaugural Green Bond Bayport Bond Issuance ZMW$172mm (~US$27mm) 4y 2014 Inaugural Bond Petra Diamonds Bond Issuance USD30mm - 5y 2015 Inaugural Bond L&T Green Bond INR6.67bn (~US$ 103m) 10y 2017 Inaugural Green Bond Bancamia Bond Issuance COP$84bn (~US$26mm) 3y 2015 Inaugural Bond Penonome Wind Interest Rate Swap Infrastructure US$66mm - 17y 2014 IFC Hedge Provider Transambiental Cross-Currency Swap Infrastructure US$15mm/EUR16mm 10y IFC Hedge Provider Recaudo Cross-Currency Swap Infrastructure US$90mm 10y IFC Hedge Provider Examples of Structured Debt Fedecredito DPR Securitization US$50mm 7y IFC acting as structuring investor 2010 Fedecredito s First DPR securitization Camesa Partial Credit Guarantee MXN1.0 bn (~USD$65mm) 2y & 3y Camesa s First Bond in MXN Copeval Trade Receivable Securitization CLP 24.5bn (~USD 45mm) 7y AA(cl) rated 2014 Coeval's first Securitization Mybank ABS / Securitization RMB170mm (~USD$25mm) 3y 2017 Mybank s first ABS Alibaba ABS / Securitization RMB180mm (~USD$28mm) 3y 2016 The first ABS Securitization SETRAG Interest Rate Swap Infrastructure US$47mm - 14y 2017 IFC Hedge Provider Vorotam Interest Rate Swap Infrastructure US$112mm 18y 2016 IFC Hedge Provider CDB Cross-Currency Swap Infrastructure US$35mm 16y IFC Hedge Provider Fhipo Mortgage Loans Securitization MXN 2000mm (approx. USD 107mm) 7Y 2018 First mortgage REIT traded on the Mexican Stock Mark Patria FIDC BRL 130mm (~USD 40mm) 6y 2018 IFC s first funded private structured credit solution in Brazil Garanti Bank Mortgage Cover Bond US$150mm 5y 2017 Garanti s First Cover Bond PT Ciputra Partial Credit Guarantee IDR 500 bn (~USD$14mm) 2y, 5y & 7y 20xx First PCG in Indonesia Compass SME Leasing Securitization ZAR1.0 bn (~USD$90mm) 6y 2014 IFC s first leasing securitization Greek Airports Interest Rate Swap Infrastructure US$59mm 17y 2017 IFC Hedge Provider Ravinala Airports Interest Rate Swap Infrastructure EUR$138mm 16y 2016 IFC Hedge Provider Bibyiana II Interest Rate Swap Infrastructure US$91.8mm 9.5y 2016 IFC Hedge Provider 31

32 Helping Clients Access Capital Markets Bonds Issuances IFC can provide its support to a bond issuance by committing to purchase a portion or the entire notes acting as an Anchor or a Sole Investor IFC s public endorsement will help to boost subscription levels and reduce the clearing yield Leverage IFC s experience as a bond issuer to offer advice on regulations, documentation and structuring across products Investors derive comfort from IFC s due diligence and stamp of approval Benefits: Access to a wider investor base IFC s public support of the issuance reduces pricing uncertainty Establish issuer name in the markets 32

33 Helping Clients Access Capital Markets Selected Examples of Bond Issuances IFC has helped clients to access the onshore and offshore bond market Banco Mundo Mujer BMM Bond Issuance COP$80bn (~US$27mm) 5y 2017 Inaugural Bond Multibank Bond Issuance CHF$38mm (~US$39mm) 3.5y 2017 Bond Issuance in CHF Davivienda Green Bond COP$433bn (~US$150mm) 10y 2017 Largest Green Bond in Colombia Banque Centrale Populaire Green Bond USD$111mm - 10y 2017 Inaugural Green Bond EDC Green Bond PHP$4.8bn (~US$ 90mm) 15y 2018 Inaugural Green Bond Petra Diamonds Bond Issuance USD30 mm 5y 2015 Inaugural Bond Bancolombia Green Bond COP$350bn (~US$100mm) 7y 2017 First Green Bond in Colombia Bancamia Bond Issuance COP$84bn (~US$26mm) 3y 2015 First Issuance in Segundo Mercado in Colombia Bayport Bond Issuance ZMW$172mm (~US$27mm) 4y 2014 Inaugural Bond Yes Bank Green Bond INR3.15b (~US$ 49m) 10y 2014 Inaugural Green Bond 33 33

34 Helping Clients Access Capital Markets Structured Debt IFC can provide different structured finance and credit enhancement products aimed at helping clients successfully issue in capital markets 1. Securitization: Pooling existing assets and future flows to issue securities that are repaid from the cash flows generated by these assets. 2. Credit Guarantees: Irrevocable guarantee of the due and punctual payment of Principal and Interest on Bonds, up to a specific percentage defined for the structure. 3. Risk Sharing Facilities: Bilateral loss-sharing agreement between IFC and an origination of assets in which IFC reimburses the originator for a portion of the principal losses incurred on a portfolio of eligible assets. Benefits: Longer term and lower cost of funding Improve credit rating profile Diversify source of funds Pave the way for future issuances without credit enhancement 34

35 Helping Clients Access Capital Markets Selected Examples of Structured Debt IFC has provided several structured finance and credit enhancement solutions to help clients successfully issue in capital markets Camesa Partial Credit Guarantee MXN1.0 bn (~USD$65mm) 2y & 3y 2015 Camesa s First Bond in MXN Copeval Trade Receivable Securitization CLP 24.5bn (~USD 45mm) 7y AA(cl) rated 2014 Coeval's first Securitization Vinte Partial Credit Guarantee MXN1.0 bn (~USD 75mm) 3y Aa3(mx) rated 2011 Vinte s First Bond in MXN Mybank ABS / Securitization RMB170mm (~USD$25mm) 3y 2017 Mybank s first ABS Alibaba ABS / Securitization RMB180mm (~USD$28mm) 3y 2016 The first ABS Securitization for Alibaba Garanti Bank Mortgage Cover Bond US$150mm 5y 2017 Garanti s First Cover Bond Fedecredito DPR Securitization US$50mm 7y IFC 2010 Fedecredito s First DPR securitization Bicbanco SME Loans Securitization BRL 250mm (approx. USD 139mm) 4y 25% 2010 Bicbanco First securitization Compass SME Leasing Securitization ZAR1.0 bn (~USD$90mm) 6y 2014 IFC s first leasing securitization PT Ciputra Partial Credit Guarantee IDR 500 bn (~USD$14mm) 2y, 5y & 7y 2014 First PCG in Indonesia 35

36 Helping Clients Access Capital Markets Derivatives Subject to regulatory approvals in a particular country, IFC can provide hedging instruments directly to clients who do not have access to quality hedging products Interest Rate Swap Cross-Currency Swap FX forwards Commodity hedges Benefits: Access to derivatives market to hedge risk exposures resulting from mismatches on the balance sheet Improve creditworthiness and profitability through accessing to hedging products Access to derivatives market without posting collateral in most cases 36

37 Helping Clients Access Capital Markets Selected Examples of Derivatives Transactions IFC has helped many clients to access the derivatives market Sun Edison Interest Rate Swap Infrastructure US$82 mm 16.5y 2016 IFC Hedge Provider Transambiental Cross-Currency Swap Infrastructure US$15mm/EUR16mm 10y 2016 IFC Hedge Provider VML Fx Forwards Infrastructure US$50mm Up to 5y 2011 IFC Hedge Provider Greek Airports Interest Rate Swap Infrastructure US$59mm 17y 2017 IFC Hedge Provider CDB Cross-Currency Swap Infrastructure US$35mm 16y 2017 IFC Hedge Provider Ventosa Cross-Currency Swap Infrastructure Recaudo Cross-Currency Swap Infrastructure Vorotam Interest Rate Swap Infrastructure Ravinala Airports Interest Rate Swap Infrastructure Bibyiana II Interest Rate Swap Infrastructure US$50mm US$90mm US$112mm EUR$138mm US$91.8mm 15y 2011 IFC Hedge Provider 10y 2013 IFC Hedge Provider 18y 2016 IFC Hedge Provider 16y 2016 IFC Hedge Provider 9.5y 2016 IFC Hedge Provider 37

38 Investing In Thematic Bonds 38

39 Investing in Thematic Bonds What is IFC s Value Proposition? Complete Package For Clients Technical support to issue a credible thematic bond Bond structuring; depending on the product type Mobilization; bringing other global investors Ability to share expertise in climate business, capital markets and the Green and Social Bond market in one package Transfer knowledge and guide the issuance process to comply with the Green Bond Principles for Green Bonds, and Social Bond Principles for Social Bonds Ability to share impact reporting tools and training available to IFC s clients, an essential element of the Green and Social bonds Ability to commit and invest in local currency green and social bonds and ability to catalyze off-shore investors alongside IFC In-depth knowledge of Impact Investors who participate in Green and Social Bonds 39

40 Investing in Thematic Bonds IFC s Green Bond Experience Inaugural issue 2010 Feb 2013 Jul 2015 Today IFC is one of the pioneers and largest global issuers in the Green Bond market. IFC issued the largest Green bond at the time, US$1bn, catalyzing a niche product to a mainstream market instrument. IFC became the first issuer of offshore rupee green bonds. Proceeds of INR 3.15 billion (~$49.2 million) used in a green bond issued by Yes Bank, a leading Indian private sector bank. FY18 marks the eighth year since the launch of IFC s Green Bond Program. In FY18, IFC issued a record volume of green bonds to date 32 green bonds for a total volume of $1.8 billion. This brings the cumulative issuance since 2010 to $7.6 billion across 111 bonds in thirteen currencies (including Chinese Renminbi, Turkish Lira). IFC plays a leadership role in developing guidelines and procedures for the green bond market as a member of the Green Bond Principles Executive Committee. 40

41 Investing in Thematic Bonds IFC s Local Currency Green Bond Issuances in Latin America Total Volume of US$382 million equivalent over 11 issuances Brazil 2018 BRL 16 million due BRL 21 million due BRL 3.5 million due BRL million due BRL million due BRL 439 million due BRL 23.8 million due 2015 Mexico 2018 MXN 100 million due MXN 250 million due MXN 500 million due 2021 Peru 2015 PEN 115 million due

42 Investing in Thematic Bonds IFC s Green Bond program was launched in 2010 and has raised over USD 7.6 billion as of FY18 end through 111 bonds including: the market s first benchmark-sized green bonds issued in February and November 2013 the first US focused retail green bond program tenors up to 30 years issues in emerging market currencies, such as ZAR, PHP and INR IFC is a founding member of the Green Bond Principles and sits on its Executive Committee Since 2015, IFC has published its annual Green Bond Impact Report based on the IFI harmonized framework template for impact reporting Total green bond issuance by currency Total green bond issuance by volume and number 42 42

43 Investing in Thematic Bonds IFC s Social Bonds offer investors an opportunity to finance IFC projects that aim to address access to essential services and income generation to underserved target populations in developing countries Social Bond Program combines two of IFC s pre-existing themed bond products the Banking on Women Bond theme and the Inclusive Business Bond theme IFC's Social Bond Program was launched in 2017 and IFC has issued in the public and private markets. IFC s Social Bond Program aligns with the Social Bond Principles In March 2017, IFC issued a $500 million transaction the first ever USD labelled Social Bond benchmark, meeting the demand of institutional investors with interest in ESG In March 2018, IFC issued the inaugural 5-year AUD300 million Social Bond in the Australian bond market 43

44 Investing in Thematic Bonds Why would an IFC Client Issue a Thematic Bond? Investor diversification Franchise value Enhances reputation in the market by generating environmental and social benefits from investments and by integrating debt management into firm-wide commitments to reduce GHG emissions and achieve environmental and social impact Cultivate a positive internal culture of long-term sustainability and ESG (environmental, social and governance) standards Green bonds also attract new investors. When Unilever, a consumer-goods company, issued a 250m ($416m) green bond in March, 40% of the issue was snapped up by people outside Britain an uncommon response to a sterling bond Economist Being the first Australian corporate to issue a green bond has confirmed that investors recognize our leading sustainability credentials and are confident in our commitment and ability to consistently deliver sustainable outcomes on our projects. Tiernan O Rourke, Chief Financial Officer Stockland 44

45 Contacts 45

46 About Us Treasury Client Solutions (TCS) WBG President IFC CEO VP Treasurer Our role: Provide IFC clients with local currency and capital market solutions in partnership with IFC s sectoral investment teams by leveraging Treasury products and markets expertise and DCM relationships. Promote development of local currency capital markets. Manage market risk of IFC s operational balance sheet. Deputy Treasurer Assistant Treasurer We help provide: Coordination Unit Treasury Market Operations Syndicated Loans & Mobilization Treasury Quantitative Analysis Treasury Client Solutions Local Currency Loans Liquid Assets Management Cash Management Syndications Operations Investor Engagement Funding and Syndications Support LAM & TCS support Asia (Singapore) EMEA (London) Risk Management Products Structured Finance Products Funding Operations and Investor Relations MIGA Partnership LAC (Washington D.C.) Capital Market Solutions 46

47 Contacts Treasury Client Solutions (TCS) Latin America and the Caribbean (LAC Team) TCS DIRECTOR Keshav Gaur Director Treasury Client Solutions MEDIA RELATIONS Emma-Kate Symons Senior Communications Officer REGIONAL DIRECTOR Gabriel B. Goldschmidt Director Latin America & the Caribbean / Janne Sevanto Head LAC Team David J. Scouras Principal Financial Officer Guy-Robert Duval Financial Officer Jose Carlos Wong Davila Senior Financial Officer Rabih S. Kanaan Financial Officer Coura Fall Financial Officer Takenori Matsuoka Senior Financial Officer Paola Cordoba Associate Financial Officer Sebastiano Bottio Principal Financial Officer Hannah Sibanda Financial Analyst Divya Nair Associate Financial Officer IFC HQ, 2121 Pennsylvania Avenue NW, Washington DC, USA IFC Offices also in: Bogota Buenos Aires Lima Mexico City Panama City Santo Domingo Sao Paulo Bloomberg: IFC<GO> 47

48 Overview of IFC July 2013 July 2018 March

49 Overview of IFC Disclaimer This document has been prepared for informational purposes only, and the information herein may be condensed or incomplete. IFC specifically does not make any warranties or representations as to the accuracy or completeness of these materials. IFC is under no obligation to update these materials. This document is not a prospectus and is not intended to provide the basis for the evaluation of any securities issued by IFC. This information does not constitute an invitation or offer to subscribe for or purchase any of the products or services mentioned. Under no circumstances shall IFC or its affiliates be liable for any loss, damage, liability or expense incurred or suffered which is claimed to have resulted from use of these materials, including without limitation any direct, indirect, special or consequential damages, even if IFC has been advised of the possibility of such damages. For additional information concerning IFC, please refer to IFC s current Information Statement, financial statements and other relevant information available at